A British Eye on Eastern Europe

THE historic liberation of Eastern Europe in 1989 seems on shakier ground today. But British politician Shirley Williams doesn't plan to stand around and watch it fall apart. Throughout an extraordinary political career that began at age 16, Mrs. Williams has embodied the philosophy of European Christian socialism, which as she notes, is that "the rich have a responsibility - and it isn't to get richer."

Williams left office in 1983, and recently took a position heading up Project Liberty, a privately financed East European exchange program at Harvard University's Kennedy School. (Her husband, United States presidential scholar Richard Neustadt, is a Harvard professor.)

Widely regarded as a dynamic and expansive thinker, Williams recently lived up to her reputation at a recent meeting with Monitor editors. Below, some excerpts:

Project Liberty, which you are heading up at Harvard, is aimed at younger elected East European politicians. How did it develop?

It grew out of a strong sense that while in the West, specifically in the United States, there is a perception of the importance of economic transition in East Europe - of moving toward free market - there is nothing like an adequate parallel understanding of the importance of strengthening the process of democracy.

Trying to establish a free market if you have a society which has no sense of what contract is about, no sense of what relationships within a civic society is about, no sense of what law and free organizations are - is not to introduce a free market. You haven't got any of the internal sanctions, the relationships of trust, that we in the West - although they sometimes break down - at least operate under.

What has been the effect?

First, a recreation of many of the old, dangerous microbes in Eastern Europe: nationalism, xenophobia, anti-Semitism, anti-Gypsy feelings. What you're looking at is a population that does not think that things are going to get better. Seventy-four percent of Hungarians in a recent poll said they thought things were going to get worse.

This is the most fortunate, most likely winner of all the East European countries. Hungarians tend to be rather gloomy, but still a poll saying we don't think we're going to get anywhere, in a country which has the largest private sector, the most rapidly developing banking sector - is not good news.

Second: If you try to privatize without having built up any kind of capital market locally, and without having converted the currency, which in all cases except Poland is true, what happens is that the only people who can raise indigenous money fast are the people who were the ruling managers of the old system - and they've made huge windfall profits.

That profit, in some cases, is being plowed into what is called "spontaneous privatization." This is not what Americans would regard as good news; it's rather bad news.

The managers of the old enterprise have raised enough money for a leveraged buy-out. And so you're beginning to get an intense disillusion as people see the managers of the bright, new, private free-market society look terribly like the managers of the old, control-command economy.

It sounds as though the euphoria of 1989 is over in East Europe.

In country after country, [there's] a perception that the great effort to get democracy is running into the ground. If we don't begin to create a civic society in the sense of what civic morality is about, with a sense of what accountability is about, with a sense about consensus creation, the spectrum of parties, different interests being represented through parties, I think this experiment could go badly awry. It's at the moment not doing well.

Nobody should sit back and say, "It's likely that there will be flourishing democracies in Eastern Europe." The present bet is that the outcome is authoritarian governments on the right.

You have advocated a postwar-style Marshall Plan for Eastern Europe.

The example of Western Europe after the war is a useful one. It is a remarkable story. It's hard to imagine that any Western European country will slip back into authoritarian government, unless there is some fantastic catastrophe. Like, for example, an explosion of migrants from the Soviet Union. But I think none of us can seriously conceive of Italy or Spain, or Germany or France, going back to a dictatorship.

The thing that made the difference was the nature of American leadership - the fact that the US insisted that any aid it gave had to be duplicated all over again by recipient countries. For example, we in Britain got Marshall aid. We had to give an equivalent sum in sterling. Nobody was a free rider. Even countries that were really poor, like Holland and Belgium, produced what they could in the way of restored dairy products and gave them to Germany.

So you had this kind of mutual-help system which was at the essence of the Marshall Plan. And what was such genius about it was that it brought all the governments in to monitor themselves and to monitor one another. It was a mutually self-governing process.

What we've produced since 1989 in East Europe has been an aid program from America, or an aid program from the EC [European Community]. None of it has worked toward growing people up to be responsible for themselves.

At the moment, Eastern Europe is fragmenting badly - Czechs and Slovaks, Hungarians and Romanians, and so on.

If one could develop some kind of Marshall plan it would be quite clear what the quid pro quo would be - that money would go to governments on the understanding that the allocation of funds were fair and equal, and that [if not], there would be no more money. Slovakia would get money if they went through the Czechoslovak federation. Then it would be possible to say to the Czechoslovak federation, "you've got to treat these folks equitably."

What about universities?

They're going through a rather agonizing changeover. Most of them required, in effect, a test of doctrine before one could teach in these universities.

In places like [Czechoslovakia's] Charles University, one of the great medieval universities of Europe, all the senior professors had to become good Marxists. Immediately after the Velvet Revolution, one of the first things that happened was that [the students] went to where Radim Palous - who is now the chancellor of the university - was living under house arrest and carried him on their shoulders and put him in the rector's chair at the university. He's been chancellor ever since.

There's no longer a state-controlled press in East Europe. What's your prognosis?

The Eastern European press is undergoing a colossal upheaval. For example, there's only one East German paper that is still alive. All the others were bought out by the great West German chains. Which means that for the moment, East German indigenous culture has been effectively destroyed. I think it will come back, because of things like desktop publishing and so on. But it'll come back as small, regional papers.

I would very much like to see again what happened after the war, which was that there was money behind all kinds of little independent papers. As you know, Die Zeit [a popular German weekly] grew out of this.

The British government backed it. The Americans similarly were behind some of the early Bavarian papers. [They] created a cultural multiplicity without falling into the problem of intense regional chauvinism.